I Help Good Companies Become Great Through ROI Oriented Marketing & System Design

Main menu

Post navigation

(This Is NOT A Sales Post But It Is Going To Help You In Growing Your Self-Improvement Business!)

I have realized that the 80 – 20 distribution and the TOC (Theory of Constraints) are largely related. This means that in any I/O system, the 20% that generates 80% of the results comes in the form of eliminating the most important system-wide bottleneck.

Life is made out of I/O systems. It is what you put in (input), you get out (output). Everything in human existence can be abstracted to some form of I/O. It is true if you go to the gym – how much you exercise and how much benefit you get from that given exercise. It is true when watching TV, when reading a book, when dating, when running, when eating. Everything in human existence can be summarized to a simple formula “you put effort in and you expect some benefit out of it”.

The 20 – 80 distribution simply states that 20% of what you do creates 80% of the outcome. This is not always true and it can be 30 – 70 or 10 – 90 or even 5 – 95. The key principle is that there is an uneven distribution between cause and effect and a small part of what will do will be highly efficient in obtaining your desired outcome while a large part will be system waste.

The TOC is something not known by most people in the self-improvement field as it is an industrial management concept. It states that a system is always limited by a major bottleneck and that the output with which a system functions is always limited to that given bottleneck. TOC states that bottlenecks needs to be either removed or the systems reconstructed around them in order to achieve a high efficiency without waste.

So how does this combine together? Any system, be it a business, dating, self-improvement, spiritual growth, improving your body is bottlenecked by something. This means that at some point, the effort you put in is reduced to the amount of that bottleneck. Imagine that you have a freeway with cars on all three lanes. At some point, it all converges into a single lane. That’s a bottleneck. The number of cars that can go on that one lane is equal to 1 / 3 of the number of cars that could go before. The entire system is reduced to the bottleneck, therefore reducing efficiency by a factor of 2X or 66.7%.

At that moment, most people take the most lackluster approach, put more input. This means putting more cars. But putting more cars won’t reduce the bottleneck, because a bottleneck is never about input but rather, about how input is dramatically lost to output. Eliminating cars is not a good idea either because yes, if you eliminate 66.7% of the cars, the bottleneck is gone as input equals output but the efficiency is exactly the same as before. This is one of the facets of the TOC, rebuilding the entire system to fit the bottleneck in the case that the bottleneck can not be fixed, as eliminating input costs is just as good as increasing output profits.

The only solution towards improving results is eliminating the bottleneck. This means making that bottleneck a three lane road so I/O once again.

How does this apply to real life? Let’s take the example of a salesman. He calls 100 people a day but he makes only $500 in sales. His conversion rate is only 10% which means 10 out of 100 people buy what he’s selling. Now, an unsuccessful and not so smart sales manager would say “work harder, you don’t want it hard enough, hoooraaaaaahh” as most inspirational and rhetorical blah blah goes. A smart one would simply say “you’re putting enough effort but you’re bottlenecked by your ability to sell. Take a few days off, improving your pitch dramatically, come back and you will get better results”.

This is why I despise most self-improvement posts on Instagram nowadays. They lack any common sense. In a system, your output is not represented by what you put in, but simply by anything under your biggest bottleneck. You’re limited not by your effort, but by your global efficiency and putting 20 hours instead of 10 hours into an inefficient system will give you the same ROI as putting 10 hours. Yes, it will give you more results, because I’m using ROI (return on investment) as a metric and not revenue but the focus for a smart person must always be ROI, what you get in for what you put out.

Bottlenecks are the reason why you’re failing in your life right now. You’re failing because your entire system is limited, is struggling in one key point. Now, you have two solutions. If you can rebuild the system without that key point, then your bottleneck is gone. In some cases, you don’t need to fix the bottleneck, you simply need to eliminate it as a critical step from cause and effect. This means rebuilding the “production line” so the bottleneck is not a required part anymore.

In most cases though, the bottleneck is important and the 20% that will generate 80% of your return is always looking at and fixing that bottleneck. It is not doing more of what you’ve done by taking a hard, critical look at what is keeping you in place and then actually solving it.

So when it comes to setting life priorities, on a day to day level, ask yourself this simple question:

“What is my major bottleneck right now in me achieving goal X?”

“What can I do to either increase this bottleneck (increase I/O ratio through the bottleneck) or eliminate it altogether from the system while obtaining the same results?”

Keep asking yourself these questions day in and day out and you’ll achieve system wide optimization where 1 unit of energy = 1 unit ot desired output in no time.

Are you interested in discovering in finding your bottlenecks when it comes to marketing and conversion? Then let’s have a talk together. I’m offering you a complimentary 30 minute session in which I’ll ask you some key questions about you and your business. After this session is done, I can tell you with a high degree of certainty how I can help you and what you’ll get out of it. Please use the link below to get started.